Liquefied Natural Gas Limited

Transcription

1 Liquefied Natural Gas Limited Clarksons Platou Investor Presentation January 2016 ASX: LNG and OTC ADR: LNGLY

2 Forward looking statement / all jurisdictions The information in this presentation is not an offer or recommendation to purchase or subscribe for securities in any one or more entities in the LNGL Group or to retain or sell any securities currently being held. This presentation does not take into account, nor is it intended to take into account, the potential and/or current individual investment objectives and/or the financial situation of investors. This presentation was prepared with due care and attention and the information contained herein is, to the best of LNGL Group s knowledge, as of the date of the presentation. This presentation contains forward-looking statements that are subject to risk factors associated with the gas and energy industry. The expectations reflected in these statements are currently considered reasonably based, but they may be affected by a range of variables that could cause actual results or trends to differ materially, including but not limited to: price and currency fluctuations, the ability to obtain reliable gas supply, gas reserve estimates, the ability to locate markets for LNG, fluctuations in gas and LNG prices, project site latent conditions, approvals and cost estimates, development progress, operating results, legislative, fiscal and regulatory developments, economic and financial markets conditions, including availability of financing. No representation or warranty (express or implied) is or will be made by any person (including LNGL Group and its officers, directors, employees, advisers and agents) in relation to the accuracy or completeness of all or part of this document, or any constituent or associated presentation, information or material (collectively, the Information), or the accuracy, likelihood of achievement or reasonableness of any projections, prospects or returns contained in, or implied by, the Information or any part of it. The Information includes information derived from third party sources that has not necessarily been independently verified. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, LNGL Group disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in this presentation to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statements were based. To the maximum extent permitted by law, each entity in the LNGL Group, along with each entity s respective officers, employees and advisers, excludes all liability (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. All references to dollars, cents or $ in this document is a reference to US Dollars, unless otherwise stated. 2

3 Corporate snapshot Corporate data ASX / US OTC ADR code LNG / LNGLY Cash balance as at 31 December 2015 ~ A$114 million Debt outstanding as at 31 December 2015 None Market capitalization (A$0.64/share) as at 15 January 2016 ~ A$322 million Current Shares on issue million Current performance rights 13.2 million Current unlisted options in issue 2.5 million Share register (as at 31 December 2015) North America (NA) ~ 50% Top 20 ~ 58% Substantial Shareholders Baupost Group 12.4% Valinor Management 10.3% Number of shareholders 9,418 NA investors owned ~ 50% of outstanding shares; Australian shareholders are most numerous 3

4 Experienced leadership Board of Directors Broad energy experience Three US-based directors Post AGM event Phil Moeller, former FERC commissioner Executive Management Deep LNG experience Post AGM events Anthony Gelotti, Chief Development Officer John Baguley, Chief Technical Officer 4

5 Corporate mission and strategy Strategy Achieve mid-scale LNG sector market leadership Satisfy customers needs competitively, reliably, and with integrity Contribute to growth and economic development in the communities in which we operate Emphasize creating safe working conditions and minimize environmental impacts where we do business Execution Identify and secure strategically located sites to build, own, and operate LNG export facilities Use the OSMR LNG process to deliver liquefied natural gas efficiently and cost effectively Commercial solutions for LNG buyers and natural gas producers that enhance their business outcomes Target geographically diverse portfolio of operated LNG export facilities OSMR technology platform Innovative, low cost, highly efficient, environmentally friendly, robust, and low risk technology Combines several well-proven, existing industrial technologies into one integrated system Integrated system delivers a market-leading LNG export capital cost Design arrangement is highly efficient, generating lower emissions and improved economics Delivering competitive and innovative LNG projects in key markets throughout the world 5

6 LNG Limited project portfolio Bear Head LNG 4 12 mtpa potential Phase I FEED complete Leveraging MLNG design All construction permits FTA approval Next steps: Pipeline path Bear Head LNG Point Offtake Tupper, Richmond County Nova Scotia Non-FTA approval New Opportunity Funnel Mid-scale market North America focus OSMR / modular build Strategic alliances Competitive EPC cost Operationally efficient O&M standardization Magnolia LNG Magnolia LNG Lake Charles, Louisiana 8 mtpa or greater EPC contract with KSJV Kinder Morgan pipeline FEIS issued / FTA in hand 2 mtpa under contract Next steps: FERC Order / NTP Further offtake Non-FTA approval Financial close Fisherman s Landing LNG Port of Gladstone Queensland Fisherman s Landing LNG 3.8 mtpa potential Approvals in hand Next steps: Gas supply Offtake Site lease decision Geographically diverse portfolio has current potential for greater than 20 mtpa capacity 6

7 North American pipeline and gas supply strategy Magnolia LNG KMLP pipeline agreement Deep and liquid Gulf Coast infrastructure Accesses onshore / offshore and conventional / unconventional resources Other pipeline options can de-risk Bear Head LNG Multiple pipeline options under review Gas supply potential: Western and Eastern Canada Offshore Nova Scotia U.S. Strong relationships with pipeline owners in North America 7

8 Mid-scale design, modular build, and construction approach Strategic Advantages Facilitates project scaling Smaller footprint minimizes environmental impact Standardized specifications maximized Increased procurement competition Fabrication yard construction Quality and schedule control Inherently safer approach Standardized mid-scale modules enable rapid, cost-effective construction Reduced project site labor Highly reliable and efficient 2-in-1 design configuration OSMR LNG process technology and smaller train size allows easy modularization and economic project development Improved economics relative to traditional stick build industry approach 8

9 Magnolia LNG - EPC contract EPC Contract 1. Legally binding LSTK EPC contract with KSJV 2. $4.345 billion, validity to 30 April Typical full wrap LSTK EPC contract scope 4. EPC contract price includes: - Siemens and Chart costs - Mobilization and de-mobilization costs - Capital spares & contractor provided insurances - Profit, risk/liability funds, escalation, contingency Other Costs 1. Estimated at 13.5% to 15.5% of EPC cost 2. Other Costs estimate includes: - Owner s engineer - Regulatory, permitting, and environmental costs - Commissioning gas and cost - O&M mobilization and other minor contracts - Internal capitalized costs from financial close 3. Excludes cap interest & financing costs Magnolia LNG 1.LSTK plant design utilises LNGL s patented OSMR technology 2.EPC guaranteed production of 7.6 mtpa, 0.8 mtpa greater than previous guidance 3.Guaranteed 92% feed gas production efficiency, LNG plant fuel gas consumption of 8% or less 4.Scope: - Four LNG production trains with design capacity of 2 mtpa or greater each - Two 160,000m 3 full containment storage tanks - Marine, barge & truck loading, supporting infrastructure and all required post-fid approvals and licenses 5.Final design capacity shall be based on closing design at FID The total EPC capital cost is in the range of US$495 to US$544 per tonne 9

10 Lowest cost project EPC + Other Costs per tonne range of US$549 to US$628 based on final FID design capacity 10

11 Magnolia LNG - targeted marketing approach Marketing with emphasis on investment grade buyers Market demand Six (6) end user/ portfolio buyers LTA & SPA contract negotiations Engagement with > 35 buyers Europe, Asia, Americas One IOC*/ Trader + 4 bankable, non-investment grade end user buyers One 20-year, full train contract signed with Meridian LNG Looking to close remaining capacity sales expeditiously Mix of tolling & FOB contracts negotiations Top 11 customers to remaining capacity provide 2.2 x cover in 20 year offtake agreements 12 other potential parties *IOC International Oil Company In commercial discussions with multiple counterparties to close out remaining capacity 11

12 Project financing Stonepeak Equity Commitment Agreement (ECA) 100% of Train 1 & 2 equity up to US$800 million, with equity contribution shared in Trains 3 & 4, all subject to CPs Stonepeak appointed one seat to Board of Magnolia LNG LLC no voting rights prior to Financial Close and equity contribution Following execution of EPC, the current ECA can now be revised with Stonepeak to address project upgrade from 2 to 4 trains LNG Equity ECA is a two-step financing with LNGL s equity interest in Trains 1 & 2 carried by Stonepeak Each party contributes equity in Trains 3 & 4 Part of Stonepeak revision is to determine equity contributions in a one-step financing LNGL exploring options for its equity funding in parallel with the Stonepeak negotiations BNP Paribas acting as Financial Advisor BNP has MLNG mandate as Financial Advisor Key deliverables Project risk and bankability reviews Review all material project agreements Project debt financing structure option analysis Preparation of Project Information Memorandum Develop financing alternatives and funding sources Deliver debt financing package at Financial Close Key lender consultants White & Case (legal counsel) Merlin (engineer and technical advisor) Poten & Partners (marketing consultant) AON (insurance consultant) Equity commitment remains firm; broad and strong lender interest exists 12

13 Liquidity management plan Strong cash position of ~ A$114 million at 31 December 2015 Majority of existing cash position held in U.S. dollars Multi-faceted cash management execution plan in place Revised cash commitments and planned obligations Planned prospective burn rate sustains operations for 36 plus months Key plan attributes Focus personnel and financial resources on contracting offtake capacity Explore all areas of enterprise activities aimed at minimizing future cash outflows Place EPC activities on hold till FID Agree prospective scope with key contractors till FID Complete pending regulatory approval processes Implement tighter limits on approving any new commitments 13

14 LNGL s competitive advantages LNG Export Market Strategy Mid-scale LNG projects Commercially viable at 2 mtpa or greater Modular build Rapid, cost-effective deployment Competitive capital cost Operationally and environmentally efficient Enhanced processing technologies OSMR liquefaction process Uses proven equipment and proven processes Improved fuel efficiency Substantially smaller footprint Leverage strategic alliances into new options North American Market Focus Abundant low-cost gas reserves Extensive, open access gas pipeline infrastructure Henry Hub linked pricing Gas cost forecasted to be competitive on a global basis long-term Country stability and transparency Clear, well-defined regulatory process Strong expertise available in the US for development, construction, and operation Two premium, permitted NA sites Third NA LNG site option under review LNGL is a pure play LNG infrastructure investment opportunity 14

15 Contacts Mr Maurice Brand Managing Director & Chief Executive Officer Mr Michael Mott Chief Financial Officer Mr Andrew Gould Group Development Manager Liquefied Natural Gas Limited Level 1, 10 Ord Street, West Perth WA 6005, Australia Telephone: (08) ; Facsimile: (08) and 1001 McKinney, Suite 600 Houston, Texas 77002, USA Telephone: ; Facsimile: Web site: ASX: LNG; OTC ADR: LNGLY 15

16 Forward looking statement / Non-GAAP financial measures The following presentation, together with all information and data contained in verbal and other written statements or presentations made by or on behalf of Liquefied National Gas Limited ( LNGL ) (ASX: LNG) (OTC ADR: LNGLY), whether related to LNGL or any of its assets, affiliates or subsidiaries, including, without limitation, Magnolia LNG, LLC ( Magnolia LNG ), LNG Technology Pty Ltd ( LNG Technology ), Gladstone LNG Pty Ltd ( Gladstone LNG ), Bear Head LNG Corporation ( Bear head LNG ) (LNGL, Magnolia LNG, LNG Technology, Gladstone LNG, Bear Head LNG and any other assets, affiliates or subsidiaries, whether named or unnamed, are referred to herein as the LNGL Group ), contains forward-looking statements concerning LNGL Group s strategy, operations, financial performance, plans, projections and expectations, all of which are subject to uncertain conditions and circumstances in the various countries, sectors and markets in which LNGL Group operates or is planning to operate. The Private Securities Litigation Reform Act of 1995 ( PSLRA ) provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. LNGL Group intends to rely on the benefits of the safe harbor provisions of the PSLRA and includes this cautionary statement for purposes of disclosure and disclaimer. Forward-looking statements are based on assumptions involving judgments and predictions concerning the future and are not statements of historical facts. Without limitation, the words "anticipate," assumptions, "believe," could, enable, "estimate," estimated, "expect," "expected," "forecast," formulated, "intends," "may," on track, opportunity, "pending," "plan," "potential," progress, "project," ready, replicate, "should," targeting, tracking, and similar expressions identify forward-looking statements. Forward-looking statements are not guarantees of outcome, results, performance or any projections, and involve significant risks, uncertainties and assumptions, the results of which often differ materially from those expressed in the forward-looking statements. Factors influencing these results are beyond LNGL Group s ability to control or predict. LNGL Group s ability to fulfill its objectives, goals, strategies, synergies and revenue, income or cash flow are subject to significant national, international, regional and local economic, competitive and regulatory conditions and developments, as well as technological competitive developments; energy, credit and capital markets conditions; inflation and interest rates; political and economic instability of oil producing and consuming nations; business and regulatory or legal challenges, decisions and outcomes; timing and success of business development efforts and opportunities; as well as weather conditions and other uncertainties. No person or company should put undue reliance on forward-looking statements. Nothing in this presentation or any forward-looking statement should be used as a substitute for any party s own due diligence investigation, nor relied upon by any party in deciding to invest in LNGL Group or any of its projects, or to retain or sell any securities in any one or more of the entities in the LNGL Group. No person acting directly or indirectly for LNGL Group is authorized to make any representation or warranty, express or implied, concerning the accuracy or completeness of the information in this presentation and any forward-looking statements. LNGL Group undertakes no obligation to update any forward-looking statements, and does no assume or accept any responsibility or liability for any inaccuracies in this presentation or forward-looking statements. Neither this presentation nor any forward-looking statement made by or on behalf of LNGL Group shall constitute an offer to sell or the solicitation of an offer to sell any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under application securities laws of such jurisdiction. No offer of securities in LNGL Group shall be made except by means of a prospectus satisfying the standards of the Securities Act of 1933, as amended or other applicable law. LNGL Group may use or express non-generally accepted accounting principles ( non-gaap ) financial measures in this presentation and forward-looking statements. LNGL Group undertakes no obligation to reconcile non-gaap financial measure to comparable GAAP measures. Non-GAAP measures should not be considered an alternative to or substitute for GAAP financial measures. NOTHING IN THIS PRESENTATION OR FORWARD-LOOKING STATEMENTS SHALL SERVE AS A SUBSTITUTE FOR ANY REGISTRATION STATEMENT, PROXY STATEMENT OR PROSPECTUS, IF ANY, FILED BY LNGL GROUP WITH APPLICABLE SECURITIES EXCHANGES. INVESTORS AND INTERESTED PARTIES ARE URGED TO CAREFULLY REVIEW ANY REGISTRATION STATEMENTS, PROXY STATEMENTS AND PROSPECTUS, IF ANY, FILED WITH APPLICABLE SECURITIES EXCHANGES. 16